Two months ago, we predicted an official closure was forthcoming for Fullscreen’s streaming service after a round of layoffs that equated to 3% of the total workforce and many tied to operations of Fullsceen’s SVOD. Now it’s official, as CEO George Strompolos broke the news to staff earlier this afternoon before distributing the below memo. The decision to shut down the service impacts up to 25 staff members from the content and operations teams.
“This is all happening in real-time,” said one executive at the company. “Some of the staff still doesn’t fully know how their jobs are impacted, or not.” But for now, VideoInk has learned that Fullscreen’s programming chief Scott Reich, who joined the company from Vevo, has been let go as part of the decision.
Fullscreen has had a tough go at building the streaming service. Before the company even launched the product it took over 2 years to develop the tech and onboard a team before going to market in Spring of 2016, after spending what sources claim topped a $100 million investment across tech, staff and content acquisition, pre-launch. At the time, Strompolos told me in a call that Fullscreen was “reinventing the future of television. And that takes time.”
[READ: BREAKING– Fullscreen Media Layoffs Include 3% of Total Workforce, Mainly from Streaming Service, SVOD Continues]
Well, time was clearly not on Fullscreen’s side as only 18 months into the business, post-launch, Fullscreen faced frequent turnover — from its first development execs Katy Chen and Polly Auritt being pushed out to various executives on the content teams being shifted from role to role, says one source familiar with the business. It also failed to produce a hit series and to generate meaningful audience. And, sources close to Fullscreen told VideoInk that a large contributor to the service’s traction over the last year was the result of a deal with AT&T to cover the subscription fee on behalf of its existing wireless subscribers as well as a poorly-received pre-install on AT&T devices. With the forthcoming Time Warner / AT&T deal, many of the businesses to be impacted by the deal are trimming dead weight — it’s an unfortunate signal for the future of the remaining 200+ streaming services in the market right now.
Fullscreen’s CEO George Stromopolos let staff know about Fullscreen’s SVOD shutting down in the below memo:
When we set out to launch our own SVOD service, we knew it would be a huge challenge. We wanted to provide a new platform for the breakthrough creators, personalities and storytellers of social entertainment — and the fans who love them.
A lot went right. Our talented team built and launched a best-in-class OTT product experience from scratch. We created bold, first-of-its-kind original programming that resonated with young fans. Millions downloaded our app and hundreds of thousands became paying subscribers.
Despite our momentum, we’ve made the difficult decision to shut down the Fullscreen SVOD service in January 2018. We came to the conclusion that funding SVOD — a longer-term investment — was limiting our ability to invest in our dynamic Creator, Brand, and Rooster Teeth divisions that have more established scale and immediate impact. I shared this news in person with the core SVOD team earlier today.
Many smart, creative people gave so much in pursuit of this ambitious project, from our staff to our talent and partners. In addition, many young fans supported us by subscribing with their own hard-earned money. We thank you all for giving us a chance.
Going forward, we will double-down on our mission to empower creators and bring brands closer to fans. The award-winning product experience and technology we’ve developed over the past two years will be valuable as we build new brands and content offerings in the future. We will continue to identify and invest in talented creators and make ambitious bets to push the space forward. It’s in our DNA. I will share more details about our evolving strategy at the December all-hands meeting.